Tags: Personal Jurisdiction
See also: McGee v. International Life Insurance Co.,
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The Burger King Corp. v. Rudzewicz case involved a Michigan resident who breached a franchise agreement with Burger King Corporation, a Florida-based company. The case discussed Florida's long-arm statute, which extends jurisdiction to non-residents who breach contracts in the state. The question was whether this exercise of long-arm jurisdiction violates the Due Process Clause of the Fourteenth Amendment. The court denied the defendants' motion to dismiss for lack of personal jurisdiction, and after a trial, ordered them to pay damages and close their restaurant. The Court of Appeals reversed the judgment, but the Supreme Court granted the petition for a writ of certiorari and reversed the decision. The Due Process Clause requires fair warning before subjecting an individual to the jurisdiction of a foreign sovereign. Personal jurisdiction requires intentional "minimum contacts" in the forum state, and the defendant's conduct and connection with the forum state must be such that they should reasonably expect to be sued there. In Burger King Corp. v. Rudzewicz, the District Court's conclusion that personal jurisdiction over the defendant in Florida for breach of his franchise agreement did not violate due process was supported by substantial evidence. Rudzewicz voluntarily entered into a 20-year franchise agreement with a Florida corporation and caused foreseeable injuries to the corporation in Florida, making it reasonable for him to be held accountable in Florida. However, the Court of Appeals erred in reversing the judgment, and the Supreme Court correctly reversed the decision.
The Court of Appeals erred in concluding that Rudzewicz had no reason to anticipate a lawsuit outside of Michigan. The Supreme Court found that the District Court's jurisdiction over Rudzewicz in Florida was valid because he had a substantial relationship with Burger King's Miami headquarters, was given notice that he could be sued in Florida, and did not prove that jurisdiction in Florida would be unfair. However, the lawyer agrees with Judge Vance's opinion for the Court of Appeals for the Eleventh Circuit, which explains why they would affirm the judgment of that court. The lower court's ruling may have been incorrect as it did not consider the franchisee's lack of bargaining power and inability to negotiate a reduced rent or franchise fee in exchange for added litigation risk. Burger King's decision to sue the franchisee in Florida impaired his ability to defend himself and violated his due process rights.
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